Submitted by BAFBFP
It is with great sadness that I find myself obliged to expose this obnoxious fallacy, that there is such a thing as access to development funding in Barbados. You see years ago, even before the demise of the Barbados Development Bank, right minded agencies like the Central Bank of Barbados, the National Insurance Scheme and the Caribbean Development Bank, the founding fathers, provided seed capital for a number of funds in the country with the expressed expectation that these funds will be put to use in encouraging and developing productive type operations in Barbados; and for those who are a little slow off the mark, “products” refers to items that one can see, hear, touch, smell along with activity that can attract foreign exchange.
The funds brought into being agencies such as the Enterprise Growth Fund, Caribbean Financial Services Corporation, Fund Access and facilities that are retailed to the public through the friendly neighbourhood Commercial Banks. It must be stressed here that to the best of my knowledge, NO private sector entity in Barbados has ever invested in any of these enterprises.
Over the years as things have turned out, these new agencies have become self supporting and other than for occupying a seat or two on the various boards, the founding fathers have little say in determining the on the ground direction that their progenies take. The result of course is that the initial agenda as stated by the initial providers of the funds (like the Barbados Investment Fund (BIF), the Industrial Credit Fund etc.) has been lost on the bureaucrats who have been fortunate enough to be posted as watch dogs on the disbursements of the monies to a needy public.
Let’s take them one at a time.
The Caribbean Financial Services people who are to retail to the public the 65 million dollars that is the BIF will NOT entertain tourism related projects Full Stop. They just won’t. In fact if one requires an audience with the decision makers one will be made to pay two and a half percent of the value of the project non-refundable, to gain such a privilege..! Decisions in this case are made by a board. Again these funds were meant for programs that the normal commercial banks would consider risky, like tourism and manufacturing. They have made the decision now to do otherwise.
Let’s move on to the Enterprise Growth Fund people. Decisions here are made by a committee. These people are considered Venture Capitalists and in theory are concerned with staying for the medium term with an equity interest. None of the members of the committee of course have any monies invested in the fund so they themselves are NOT actually venture capitalists, so it is understandable perhaps why their decision making mirrors that of the standard commercial bank with regards to risk taking. They too are unlikely to entertain manufacturing and tourism type operations, though they will point to a couple of examples as a means of deflecting the reality of their historical approach to facilitating the intentions of the founding fathers.
And let’s take a look at the Fund Access people. This institution will hold fast to the notion that it will operate with the lending policy of a bank, low risk, but with the only difference of not requiring collateral as security from the borrower. It is in fact a business that exploits those who do not have collateral but will settle for small amounts (100,000 or less). Decisions here are entrusted to one man; one man! The board, of course there is a board, is hardly expected to interfere with the strategies of this single operative, even though from the outside one would believe that the board should have a say in a national agenda that is to be exercised by the institution. You see the board hardly meets anyway.
And finally there are the commercial banks who are to retail the Industrial Credit Facility where the bank is reimbursed up to 90% of the loan to the productive entity. These f#cks are prepared to lend alright, but between 11 and 14 % interest on projects for which the funds were made available in the first place. Their claim is that tourism is high risk (what does it matter that the Central Bank is reimbursing them) so the interest rates will be high. The problem here of course is that ALL of the institutions mentioned are success stories, and it is because they are successes that it will be very unlikely for any policy setting institution (read Party) or member of such (read Minister), to step in and try to redirect their activities. These institutions have succeeded on the traditional approach of low risk lending to well represented types of businesses. So phraseologies such as “entrepreneurial productive enterprises” will be lost on them.
Oh dear I have written too much already, but I must add this. The composition of the boards and committees of these institutions is primarily one of Lawyers, Accountants and Civil Servants, with the occasional business person stuck in for image purposes. This business person will be drawn from insurance and banking. These people are the most risk adverse campaigners in the history of mankind and it is at this level operation that the future of the productive plant that is Barbados, lies … My God!
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